ABN 30 116 800 269
Level 7, 1008 Hay Street
Perth WA 6000
PO Box 7209
Cloisters Square WA 6850
Ph +61 8 9389 2000
Fax +61 8 9389 2099
[email protected]
18 June 2015
ASX Release
MGC Signs €40,000,000 Cannabinoids Offtake Agreement
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MGC Pharmaceuticals Pty Limited (MGC) secures multi-year off-take agreement with
European cosmetic production company
Worth in excess of €40 million, MGC is the first ASX related cannabis or hemp company to sign
a wholesale CBD supply contract
Immediately accelerates commercialisation timetable and initial revenue streams
MGC plans to supply Cannabidoil (CBD) resin extract from its growing operation to be
established in Slovenia, pursuant to recent license approvals
Off-take agreement for a minimum supply of 300kg of CBD resin per year – valued at €55,000
per kg for 100% CBD purity- for a 4 year minimum term
Initial offtake partner produces a line of CBD cosmetic and medical products and intends to
further extend its product range and supply into international markets
MGC is now confident that it will meet or exceed its previously announced net revenue
forecasts for 2016 and 2017
Erin Resources (ASX: ERI or the Company) is pleased to update investors on a commercially significant
development for MGC Pharmaceuticals Pty Limited (MGC) with the execution of this multi-year, €40
million CBD offtake contract. This development follows the announcement on 18 May 2015 that Erin
had entered into a binding heads of agreement with the option to acquire 100% of the issued capital
of MGC.
€40 million CBD Offtake Contract Signed
MGC’s has executed a heads of agreement (HOA) with Natura Laboratories Limited (Natura) to supply
a minimum of 300kg of CBD resin extract per year for a minimum of four (4) years. Under the
agreement MGC will supply CBD with a minimum 60% purity making the agreement worth over €40
million (AUD$60 million), and the business is now very confident it will begin generating significant
revenue from Q2/Q3 2016.
Natura Laboratories have specific clinical expertise in plant based chemical products that are
developed for the cosmetics and medical industries. Natura are already producing a number of
cosmetics products for sale in international markets, which include skin, facial and eye creams, hair
care and oils. Natura has also developed Nano-technologies for CBD delivery, including NANOcapsules
and Slow Release patches for better penetration of the CBD through the skin layer, making them the
ideal solution to use in skin and facial creams.
This agreement makes MGC the first ASX related company to secure a major commercial offtake
contract, supplying its CBD production to the end user, accelerating its commercialisation and
providing near-term revenues. The offtake agreement will run for an initial period of 4 years and is
revolving at the election of both parties.
In addition, MGC will shortly commence its initial work programs with Natura to develop the formulas
for use in the cosmetics, food supplements and medical devices in development under the Joint
Venture announced on 16 June 2015, and is currently sourcing the CBD to use in this testing phase in
Q3 CY2015. Until MGC’s CBD resin is available from its Slovenian operations in commercial volumes
during 2016, Natura and MGC will source the CBD resin extract from external sources.
Nativ Segev, Co-founder and Managing Director, MGC Pharmaceuticals Limited commented:
“We have secured a financially strategic partnership with Natura Laboratories following the execution
of the JV for the research and development of CBD products for the cosmetics and pharmaceutical
industries. This €40,000,000 offtake agreement is of critical importance to MGC and validation of our
business model and industry credentials, and is expected to rapidly accelerate our path to
commercialization and secures our ability to meet or even now exceed our current revenue forecasts.”
Erin Resources, Executive Director Mr. Brett Mitchell said:
“This is a significant commercial milestone for MGC. With the execution of this $60,000,000, 4 year
minimum offtake agreement, which makes MGC the first ASX related vehicle to have secured a major
wholesale supply contract. In conjunction with the license approvals in Slovenia we’re confident that
MGC is on track to meet its initial stated goals both financially and operationally. The board believes
this is a great opportunity for shareholders and I look forward to providing further updates on the
progress of MGC.”
-EndsFor further information please contact:
Media Enquiries
Asher Moses
Director
Media and Capital Partners
+61 438 008 616
[email protected]
Erin Resources Limited
Brett Mitchell
Executive Director
+61 8 9389 2000
[email protected]
About MGC Pharmaceuticals
MGC Pharmaceuticals Limited (MGC) is an EU based medical and cosmetic cannabis company with
over 40 years of technical and commercial experience in the medical and cosmetics cannabis industry.
The Company’s core focus and strategy is to develop and supply high quality non-psychoactive
Cannabinoid resin extract (“CBD”) to the growing European cosmetics market, through its industry
experienced Israeli executive team.
About Erin Resources Option to Acquire MGC Pharmaceuticals
Erin Resources has entered into a binding heads of agreement with the option to acquire 100% of the
issued capital of MGC Pharmaceuticals, as announced on 18 May 2015. The Option may be exercised
within six months by Erin Resources from the date of HOA execution. The exercise of the Option will
trigger the formal acquisition process and a full re-compliance with the ASX listing rules.
www.erinresources.com
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